v Molson Coors – Background:
The foremost and popular
brand in Canada is beer. One of the oldest and famous brewed beer in Canada is
known to be Molson Coors. The Molson and Coors were originally two different legal
corporations. However, the merger of “the Colorado-based Adolph Coors Company”
and “the Canadian brewer Molson Inc.”, was positioned as the fifth largest beer
brewing company worldwide. The merger of both companies brought them to gain highest
profits and status. The birth of Molson Inc., was in 1786 and Adolph Coors in
1873. After the merger, the Coors and Molson families came together to run the
new merger business called Molson Coors. The founder of this finest beer, Mr.
John Molson brewed his first beer in 1959 on the banks of the St. Lawrence in
v Exporting country:
The Molson Coors is legally
involved in International Trade business and it exports the finest brewed beer from
Canada to 50 different countries like India, Japan, Australia, Newzland, United
Kingdom and etc. The ability to market the goods to other countries is an honour
and not a right as we should take into consideration the export legislation,
basic elements of contract as well as follow the rules and regulations. Molson
Coors beers made various agreement to distribute their various brands in different
zones of the world for example in UK and Japan in 2010 and in Australia/NZ in
Before exporting the beer to
different parts of world. All Countries should keep up with rules and regulations
to avoid the penalty.
According to Canadian export regulations it
Business number, Documents, Reporting goods, Exchange
rate, Filling export declaration and Certificate of origin.
The bilateral trade between
India and Canada: Canada and India share a legal heritage, international
trade law and common law, and in some respects both legal systems are alike. In
the exporting agreement with Molson Coors beers one of the objective followed
is the export control restriction, regulations and prohibiting goods. The delivery
of exports are not released until they are checked by competent legal counsel
and documentation process is done i.e. (commercial invoice, letters of credit,
bills of exchange or invoices). This contract made the initial investment of
$35 million. In the End March of 2011 the sales was just under 27 million and
it has a per capita consumption of just under 1.5 litres. The sale market in
India for Molson beer grows at 12% CAGR and is estimated to grow to 50 million by
2020, putting it in the top 10 beer markets globally.
The bilateral contract between
United States and Canada: One of the exporting contract done by Molson
Coors beers is with United States i.e. with Heineken Company. Heineken&
Molson Coors Brewing Company came together to sign the 10 years of legal exporting
agreement (whereas Molson Coors will export the beer into the USA market and
will sale out the Sol brand in the United States). To increase their sales and
shares Molson beers company followed the legal paper procedure through the
Class A and Class B negotiable shares which they trade as their share capital
in Molson Coors Canada Inc., which is an entirely owned subsidiary of the registrant.
With all of their operations in the USA and Puerto Rico, which have projected
total revenue of $6.6 billion. They generated the revenue reserve of $500
million annually by the third year, the companies say. The company followed
the GAAP act, and they did not include the gross sales of MillerCoors and
it was reported that gross sales was about $7,725.5 million net of excise taxes.
Elements of a contract:
Exchange of offer and acceptance:
In order to form a valid legal
contract one party should offer something of value to the other party at some
specific terms and in exchange the other party should accept. Here, in this case
the contract is between Canada (exporter) and India (importer). It is the most
basic element of any contract.
Letter of Intent:
LOI in civil law: The LOI may or may not constitute a
contract, depending on the wording and the intention of the parties that is
India and Canada. For example, when exporting beers to India, the Indian importer
might do a contract or might not do a contract as well if the latter trust enough
Delivering late or to the wrong
location is another easy way to make a transaction fall apart. Therefore, make
sure the contract is clear about the time and date of delivery, the delivery
location, and which party is responsible for the risk of loss of the goods while
they are in transit.
3) Inspection Period
Many sales contracts leave out the
inspection period. This period gives the buyer time to inspect the goods after
delivery and reject any nonconforming goods. The inspection period varies depending
on the type of goods involved.
With goods that have a short shelf
life, such as perishable food items, buyers are usually required to accept or reject
upon delivery. However, with more expensive items, such as machinery, buyers
often have anywhere from a couple days to a month to inspect.
Warranties from the Seller
Buyers often overlook the warranties
being made by the seller. There is no such thing as “standard warranties.”
Warranties vary across industries and from company to company, so be sure to
closely review the seller’s promises. Are the goods being sold “as-is”? Is the
seller disclaiming the warranties of merchantability or fitness for a
particular purpose? If so, this might undo any verbal promises about the goods
made by the seller.
Obviously, the total price of the
goods is important, but don’t forget about the other payment details. Will the
goods be paid for in installments or in one lump sum? Does the seller require a
specific method of payment? If the buyer won’t be paying right away, it is
common for the parties to also execute a promissory note to spell out the repayment
terms in greater detail. Among other things, this allows the seller to charge
interest and outline a repayment schedule
law of Molson Coors:
The contract of Molson Beers is governed and construed in
accordance with the laws of the State of Colorado and With respect to any
disputes or claims not subject to arbitration.
The Council monitors and takes responsibility and
accountability for CR performance and business reputation. All local, state and
national laws are followed. In the UK and Ireland, Legal and Corporate Affairs
department reviews the company’s marketing and packaging for compliance with the
UK’s Advertising Standards Authority Code, the Portman Group Code of Practice
and Molson Coors’ internal Marketing Code.
In this assignment, Canada will be the exporting country
while India, the importing country. It is crucial for every business owners to
know the export rules and regulations for any target countries before entering
into any transaction with foreign buyers. As a result, the ability to sell
goods to other countries is a privilege and not a right as we should take into
consideration the export legislation as well as comply with those regulations.
Canada and India enjoy a prosperous trading relationship.
Canada and India held negotiations on the NAFTA to improve trade relations between
the two countries. India and Canada is marked by common values and shared
traditions of democracy, the rule of law and pluralism. There is a bilateral
trade between India and Canada for decades. Canada and India share a legal heritage
based on English common law, and in some respects our legal systems are
similar. But there are also considerable differences, and Canadian companies
doing business in India will need to use local expertise if they want to avoid
being exported from Canada are required by the Customs Act to be reported. The
three main objectives of export reporting are to:
the export of restricted (i.e. regulated, controlled, or prohibited) goods;
accurate information on Canadian exports; and,
the outbound movement of goods in transit through Canada.
As any experienced exporter knows, international trade is
inherently more complex than domestic trade, and this complexity is reflected
in the structure of international trade contracts. Perhaps the most basic issue
is that these contracts have to comply with two possibly divergent sets of
laws, those of the exporter’s country (Canada) and those of the importer’s
country (India). This is why it’s
vitally important to establish clearly which country’s law will govern the terms
of the contract and any disputes that might arise from it. Furthermore, no exporter
– to India should sign any contract until it has been carefully reviewed by
competent legal counsel. If India and Canada do sign without this advice, they risk disputes and possibly
litigation over payment, breaches of contract, breaches of guarantees, ownership
of intellectual property, creditors’ rights and other difficulties too numerous
to mention. Protecting yourself from such problems will definitely require the
services of a local legal professional.
When exporting to India, Indian customer is likely to require some kind of contract
performance security to ensure that that they will fulfill the end of the
bargain. These securities are usually referred to as “bonds” and include
standby irrevocable letters of credit, letters of guarantee and contract surety
bonds. If Canadian exporter provide one of these instruments, the latter should
make sure that the contract clearly stipulates performance obligations, as well
as the conditions under which India can make a valid call for non-performance
and thus have the security paid out to him.
in civil law: The LOI may or may not constitute a contract, depending on the
wording and the intention of the parties that is India and Canada. For example,
when exporting beers to India, the Indian importer might do a contract or might
not do a contract as well if the latter trust enough the exporter.
liability is the area of law in which manufacturers, sellers who make products
available to the public are held responsible for the injuries those products
cause. For instance, the Canadian Exporters should make sure that the beer they
are selling are of god quality and as such Indian importers on their behalf
should make sure that the beer they are importing will not cause any harm to the
country. Convention on contracts for the International Sale of goods is the
main element in most contracts.
Liability laws are an essential part of Canadian trade laws for two very
Canadian provinces that use common law, the law of product liability is governed
by the following factors:
contract laws of each province and territory, Tort law (unintentional tort of negligence);
whether or not an injured party must prove that negligence occurred depends on
many factors, including the type of product, the circumstances of its purchase
and the applicable law.
export Beer in India, Canada should follow some rules and regulations. For
instance, Canadian export regulations include:
exporting beer to India
export beer, certain documentation is required (commercial invoice, letters of
credit, bills of exchange or consular invoices). All information must be complete
and accurate and attention must be paid to required statements of value and
price. For Canada export beer, India should register with Canada Revenue Agency
to obtain a business number.
such, the most important document required is a completed Canada customer
invoice for all commercial shipments exported into Canada. India can use its
own form if the required information is provided. At the border, Canada or
customs broker also submits its form. Other documents provide for customs clearance
include cargo control document and bill of lading.
and due diligence
first line of defence against contract problems is strict due diligence. When
Canada is exporting beer to India, it should always find out about India’s creditworthiness,
its financial record, the quality of its management, its business history and
its reputation in the Indian and international marketplace. Other information
sources concerning trade between India and Canada include the customer’s bank/
sellers back, and Canadian firms that may have dealt with the beverages in
India. It can be difficult to enforce contracts in India, so each clause in the
contract should be very carefully written and thoroughly reviewed by legal
counsel familiar with Indian business and financial practices. Due diligence
and clearly written contracts will substantially reduce your risk of business
best way to ensure payment is to use a letter of credit (LC) and to stipulate
this method of payment in the sales contract. LCs are very common in international
trade because they use banks to receive and check shipping documents and to
guarantee payment, and this provides a high degree of security for both Canada
and India. LCs can also be confirmed or unconfirmed. For example, an Indian bank can confirm an LC issued by a
Canadian bank, thus guaranteeing that the Indian bank will pay you even if the
foreign bank doesn’t. This kind of LC is obviously much better for you than the
unconfirmed kind. LCs can also be irrevocable. This means they can’t be cancelled
or amended without your approval. The most secure form of LC is one that is
both confirmed and irrevocable.
disputes can be complex, lengthy and costly. It is impossible to foresee all the
possibilities that could spark a disagreement or diminish a business relationship.
Taking preventative measures to avoid conflict is always highly encouraged.
instance, if Canadian exporter did not follow the proper guidelines, India can
go for an arbitration. This means the importer and exporter agree to accept the
decision of an impartial person who will listen to both sides of the case and
then come to a final decision. However there are certain cases that cannot be
arbitrated, involving Claims or allegations of a defect in the design of Your Vehicle
or the design of any of the Materials of Your Vehicle.
is the traditional method. Cost and time have encouraged those engaged in international
trade to seek alternative dispute resolution methods. Jurisdiction is a key
factor. A valid jurisdiction should be chosen when the contract is drawn up.
Conflicts of law and jurisdiction are extremely expensive. To promote international
investments, many countries enter into bilateral investment treaties (BIT).
India and Canada has a bilateral investment treaties. BITs between nations specify
the terms governing private investment of one nation’s businesses or government
in the other country. Some guarantees granted in BITs:
and equitable treatment
transfer of means
protection and security
property is the legal right to ideas, inventions and creations in the
industrial, scientific, literary and artistic fields. It also covers symbols,
names, images, designs and models used in business.
Canadian Intellectual property system consists of six federal statutes that have
evolved in response to issues such as global technological developments, international
treaties and public access needs. Foreign companies carrying on business in
Canada must make themselves acquainted with both the requirements of and protections
provided by this legislation.
Property in Canada is governed under six parts of federal legislation: